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Deficit wars accelerated into a tale of two realities as Premier Alison Redford blamed a down-turned economy and a whole new world situation for turning to borrowing for Alberta’s roads, schools, hospitals and water systems.

“For us, it’s about reality. Reality is that the economic down-turn has gone in a way that nobody expected it to,” she said.

Not so much, said Wildrose Leader Danielle Smith.

“This is, I think, fairly typical of a premier who likes to talk out of both sides of her mouth. She wants to have it both ways, and the bottom line is the world hasn’t changed so much that we need to go into debt,” she said.

“We have a government that needs to get its spending under control.”

Echoes of the spring election campaign, when the Progressive Conservatives projected provincial coffers flush with $10 billion surplus revenue over the next few years as all the opposition parties toed a skeptical line.

“They took a budget to the public that was clearly based on made-up information. They campaigned on increasing spending, again with numbers that were clearly made up and now reality is setting in for them, but it was a reality I think they knew going into the election, right from back in February,” Smith said, pointing to promises to increase spending, increase savings and to not go into debt.

“They just didn’t want to campaign on this, they didn’t want to go to the electorate and say ‘Hey vote for us and we’ll go back into debt again,’” she said.

“There was not one inkling that this was what they were going to do during the election campaign.”

That was then, this is now, said Redford.

“It’s not something we talked about during the campaign because that wasn’t the fiscal reality during the campaign. I think that you’ve clearly seen through our first quarter update and what’s going on in the world that the world has changed, that’s what happened, and we’re still going to build for the future,” the premier said.

In recent weeks, Redford has been splitting the budget into infrastructure versus operating budget, reframing a campaign promise of no deficit by 2013 to one of no deficit in the operating budget — in a province that’s never had an operating deficit. That, Redford said, is how the province manages its budget “in tune with the times,” and she pointed to fiscal woes at the federal level, where a budget deficit will be larger than expected this year.

Redford lashed back at Wildrose critics who’ve said by going into debt to finance infrastructure she’s not keeping her campaign promise to balance the budget.

“It’s entirely predictable, except when they’re speaking in the Legislature speaking on behalf of their constituencies and saying that they’d like more schools and hospitals,” she said.

Redford reinforced another campaign line of backing away from the cuts of the Klein era.

“We know that in the past, even though they were decisions that Albertans supported at the time, that that had an impact on the quality of life that we had and we had an awful lot of catch up to do and we’re not going to fall behind again,” she said.

Smith touted Klein as a fix-worthy fiscal example for a government unwilling to exercise fiscal discipline.

“The private sector can make money at $85 (a barrel for oil), Ralph Klein was able to balance the budget when it was $30, why can’t this government balance the budget at $85?” she asked.

“They think that all they have to do is wait out the relative weakness in oil prices, hope that they can get the pipelines built so that we can get world prices for our product, hope that the bitumen royalties will continue to grow with an increase in production and hope that oil and gas prices bail them out again,” Smith said.

What happens, she wondered, when there’s a real crisis in oil prices, with Alberta’s record $40 billion-plus budget relying heavily on bitumen royalties.

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